Budget Watch: Series 14

The lengthening line of investors clutching share application forms at the collection centres clearly shows an investment 'hunger' among Nepali investors. This is a great opportunity to the entrepreneur to do business collecting funds through capital market and for the government to develop investment friendly policies to channel funds through capital market in productive sectors to boost the economy. To manage, develop and satisfy the hunger of capital market the following points are recommended for the coming budget:
* Government should strengthen Securities Board of Nepal (Sebon), the regulator of Nepali capital market, financially, technically, resourcefully. It should not become an avenue of political appointment but should be developed as an avenue of capital market experts.
* To avoid present problems of paper-based transactions and centralized (limited in the Valley) stock market, Central Depository System (CDS) should be immediately initiated and different trading centers should be developed in major cities. It will help broaden the area of capital market and allow access to non-Valley investors.
* Government should address the problems of shareholders of Agriculture Development Bank Ltd.
* Limited number of brokers and their long time syndicates should be broken by strengthening Nepse's resources and bringing easy entry-exit policy of brokerage firms.
* Investors' identification number should be created to identify real investors and control fraud and fake application in primary issue.
* Being an agricultural country, agro-based companies should be brought into the area of capital market to increase production and fulfill the increasing need for food.
* Tourism, hotel and hydropower companies should be encouraged to provide profitable investments avenues to the hungry investor and boost the country's economy.
* Government should incorporate in the budget options to facilitate micro hydropower to use local resources (capital and water) and improve the economic soundness of villagers.
* Budget should encourage the private sector to establish solid waste management (fertilizer) company to solve the day-to-day problem of waste management in urban areas like Kathmandu Valley. The company will produce organic fertilizer. It can be used in farming and government should subsidise the fertilizer to the farmer.
* Institutional investors should be facilitated for efficient and sustainable development of the capital market.
* Merger and acquisition laws as well as regulations should come into effect to facilitate the increasing number of financial institutions

Rabindra Bhattarai,
Stock Analast